The Government said its economic plans were creating growth and jobs after new figures showed another big fall in unemployment and more people in work.

Unemployment could soon fall below two million, while the number of people claiming Jobseeker's Allowance is on course to dip below a million for the first time in six years.

The jobless total was 2.08 million in the quarter to June, down by 132,000 on January to March and the lowest since the end of 2009, giving an unemployment rate of 6.4%.

The claimant count fell for the 21st month in a row in July, by 33,600 to 1.01 million, according to the Office for National Statistics.

If the trend continues, the number of Jobseeker's Allowance claimants will fall below a million next month for the first time since September 2008.

The number of self-employed people has reached a record 4.5 million.

More people are in work - up by 167,000 over the quarter and by 820,000 compared with a year ago, to 30.6 million.

Unemployment has now fallen by 437,000 over the past year, although there was a 15,000 increase in the number of people classed as economically inactive to 8.8 million.

The figures also revealed that the number of Romanians and Bulgarians employed in Britain between April and June rose nearly 10% compared with the previous three months.

The number of unemployed 16 to 24-year-olds fell by 102,000 over the quarter to 767,000, more than 200,000 lower than a year ago, the biggest fall since records began in 1992.

Long-term unemployment also fell, with the number out of work for over a year down by 75,000 to 738,000.

Work and Pensions Secretary Iain Duncan Smith said: "In the past, many people in our society were written off and trapped in unemployment and welfare dependency. But through our welfare reforms, we are helping people to break that cycle and get back into work.

"The Government's long-term economic plan to build a stronger economy and a fairer society is working - with employment going up, record drops in youth unemployment and hundreds of thousands of people replacing their signing-on book with a wage packet.

"This is transformative, not only for these individuals and their families, but for society as a whole. That is why we have set full employment as one of our key targets - bringing security and hope to families who have lost their jobs and others who never had jobs, we put people at the heart of the plan.

"The best way to help even more people into work is to go on delivering a plan that's creating growth and jobs."

Unions and employers welcomed the continuing fall in unemployment, although concern was raised about wages after pay fell by 0.2%.

TUC general secretary Frances O'Grady said: "The combination of rising employment and falling pay growth suggests the economy is very good at creating low-paid jobs, but struggling to create the better-paid work we need for a fair and sustainable recovery.

"The fact that self-employed workers generally earn less than employees means our pay crisis is even deeper than previously thought, as their pay is not recorded in official figures."

"For Iain Duncan Smith to claim that people are 'better off' in the face of these figures shows just how out of touch this Government is."

John Philpott, director of the Jobs Economist, said: " This recovery will serve to re-write the economic textbook: a record number of people in work, an even faster pace of decline than in recent quarters, yet all this good news is combined with ever lower pay pressure."

Ian Brinkley, chief economist at Lancaster University's Work Foundation, said: "We have strong employment numbers, a significant drop in unemployment, and a sharp fall in the number of people in part-time jobs who say they would like full-time work, which suggests the recovery is at last making in-roads into under-unemployment. But the wage data is dismal."

David Kern, chief economist at the British Chambers of Commerce, said: "These figures show that the UK labour market is strong and flexible. However, wages growth declined on the quarter for the first time in five years, which is a warning sign that the economic recovery, although on the right track, is still fragile."

Unite general secretary Len McCluskey said: "The British economy is in a Jekyll and Hyde situation.

"While the fall in the jobless total of 132,000 is welcome, we have to ask what sort of jobs have those people entered? At the same time, the wage siege continues."

John Cridland, director-general of the CBI, said: "It's encouraging to see the unemployment rate has fallen to its lowest since 2008, with far more opportunities being created for young people.

"While disappointing this month, we would expect wage growth to pick up over time, but this can only go hand in hand with improving productivity.

"The latest figures are very upbeat, but we cannot ignore the fact that far too many young people are still out of work. Youth unemployment was rising even in the good times and is still high enough to fill Wembley Stadium over eight times."

Unison union general secretary Dave Prentis said: "Any fall in unemployment is welcome but the rise of the number self-employed is a worrying trend. They are likely to earn less than those in full-time jobs as well as being less secure."